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Thursday, March 8, 2012 10:33 pm

Illinois lawmakers in for unpleasant budget experience

Last year, the House was able to control the Statehouse budget process by releasing low-ball state revenue estimates early on and then vowing to stick to those numbers no matter what.

The Senate Democrats wanted to spend more money, but were eventually stymied by the House’s revenue estimates. There was just no way around the problem. Some Senate Democrats thought about forcing the spring session into overtime, but that would’ve been stupid because then the budget would’ve required a three-fifths majority to pass - and that would’ve given the Republicans a seat at the table. And the Republicans wouldn’t want to spend more money.

It’s too early to tell, but this year may be different. Last week, the House kicked off the budget process by locking in the chamber’s new revenue estimates. The estimates are $221 million below the governor’s revenue projections and $271 million below the projections released by the General Assembly’s Commission on Government Forecasting and Accountability.

The main differences are in income tax projections. The House’s estimate for personal income tax collections are $302 million below the governor’s, while the corporate income tax estimate is about $50 million above the governor’s.

The differences aren’t nearly as dramatic as last year’s round of budget-making, when the House’s estimates ended up being about a billion dollars below the Senate’s. But a difference of $221-271 million is still quite significant, particularly in a year when so many popular state programs are facing a painful budgetary chopping block.

The Senate Democrats basically got rolled last year and had to swallow cuts which many members of that caucus did not want. They were hampered not only by the House’s lower revenue projections, but also because their two brand new Appropriations Committee chairmen got bogged down in the details of the state’s new “Budgeting for Results” law. The hearings on that new law slowed the chamber’s budget process down and allowed the House to pass its own appropriations bills first.

Senate President John Cullerton said last week that there would be some changes in the way his chamber deals with the budget this year. He also said he’d spoken with House Speaker Michael Madigan and as a result he said he strongly believed that this year’s process would be far more cooperative than last year’s.

And, indeed, there have been changes. The new House revenue forecasts were devised in cooperation with the Senate’s Revenue Committee.

Even so, reducing expected revenues won’t go down well with the more liberal members of Cullerton’s caucus, most of whom are already outraged at the cuts proposed by Quinn and have a very strong, unified and powerful voice in that chamber. Finding another quarter billion dollars in reductions will undoubtedly be seen as a bridge too far.
These estimates also come in the context of the enormous pressure to slash Medicaid spending by $2.7 billion. The liberal rank and file push-back against that demand by Gov. Quinn is enormous, despite the very real and credible evidence that ignoring the problem or even just coming up with a partial solution will lead to a systemic crisis in a matter of just a few years. Doing nothing will create a $21 billion mountain of overdue Medicaid bills in five years. And the total will keep going up after that. The whole system could crash.

But the people who run the government might also try a bit of old-time Statehouse fudging.

OK, we’re now going to do a little math, but it isn’t hard, so stay with me.

Gov. Quinn wanted to take $162 million next fiscal year and pay off past-due bills. Steve Schnorf, a former state budget director himself, suggested late last week that Quinn might wind up putting that $162 million back into state spending programs. The cuts which would then have to be made would total $60 million ($221 million via the House’s revenue forecast minus $162 million that was put back into the budget). That would be a lot easier to swallow.

Even so, the uproar over Quinn’s proposed budget and Medicaid cuts is so intense now that even if the legislative leaders and the governor do manage a bit of fudging, there are going to be some very furious people in the Statehouse the rest of the spring. Nobody is in for a pleasant experience.  

Rich Miller publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.
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